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AICPA Adapted Generally accepted accounting principles require the use of accruals and deferrals in the determination of income.
If revenue should not be recognized at the time of sale, indicate what method should be used to recognize the revenue.
Identify what accounting assumption or principle each procedure or practice violates, and indicate what should be done to rectify the violation.
Define the objective of general purpose external financial reporting. Then discuss each of the fundamental and enhancing qualitative characteristics.
Discuss the relationship between the accounting equation and the double-entry system of recording transactions.
What is the difference between a permanent and a temporary account? Give examples of each.
What is a perpetual accounting system? What journal entries are involved?
What are prepaid expenses and deferred revenues? Give an example of an adjusting entry to update each of these items at year-end.
What are accrued expenses and accrued revenues? Give an example of an adjusting entry to record each of these items.
What is a periodic inventory system? How is cost of goods sold computed when a company uses a periodic inventory system?
Show, without amounts, the form of the closing entries for a retail store using a perpetual inventory system.
What is a subsidiary ledger and a control account, and why are they used? Give an example of how they work.
What are the major special journals? Give an example of transactions that would be recorded in each journal.
The building has an estimated life of 40 years and an estimated residual value of $5,000.
Its contributed capital was $56,000 at the beginning of the year, and it did not issue any new stock during the year.
The buyer issued an 8%, 12-month note for this amount, with the interest to be paid on the maturity date.
Hernandez Company rents out a portion of its building to Crider Company for $1,000 per month.
On April 1, 2010, Ranee Company borrowed $20,000 from its bank by issuing a 9%, 12-month note, with the interest to be paid on the maturity date.
At the end of the year, Vickelly determined that customers owed it $12,000 and it owed creditors $10,000.
Annual straight-line depreciation for the company's equipment is based on a cost of $30,000, an estimated life of eight years, and an estimated residual value.
The company's checkbook shows a balance of $4,700, which includes cash receipts from customers of $51,300 and cash payments of $49,300.
Your business associate mentions that she is considering investing in corporate bonds currently selling at a premium.
At that time, the remaining recoverable units in the mineral interest are estimated to be 500,000 tons.
Wallace has arranged to sell $170,000 of new common stock in 2014 to meet some of its financing needs.
Distinguish between the categories of users of financial statements. Why might their decision-making needs be different?